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Education IRA
A Smart Way to Save for Your Child's Education!

The Coverdell ESA, also known as the Educational IRA, is a type of tax-advantage savings account created by the Taxpayer Relief Act of 1997. This IRA’s sole purpose is to help you pay for your child’s education expenses such as: tuition, fees, books, supplies, equipment, and in some cases room and board and computers.

Who Can Contribute

A single filer with a Modified Adjusted Gross Income (MAGI) up to $95,000

A joint filer with MAGI up to $190,000

Contribution Limits

Up to $2000 per year until the child (Designate Beneficiary) reaches the age of 18. (Does not apply to special needs beneficiaries)

Tax Advantages

Tax free withdrawals including earnings for qualified expenses.

Withdrawals

There are no penalties for withdrawing money from your Coverdell ESA for the following reasons:

What if the child does not use all of the money saved in the ESA?

A Designated Beneficiary can be changed if that child does not use all of the money in the Coverdell ESA. (spouse, sibling, step-sibling, niece, nephew, first cousin, etc as long as they are under the age of 30)